Rural electric cooperative (cooperatively-owned electric utility)

A customer-owned electric utility that was created to transmit and distribute power in rural areas. Rural electric cooperatives benefit from below-market financing from the Rural Utilities Service (formerly the Rural Electrification Administration), as well as low-cost power from federal hydroelectric projects. In addition, most do not pay state or federal income taxes. Rates for rural electric cooperatives typically are set by a board of directors elected from among the cooperative's members. Today, rural electric cooperatives serve about 11 percent of the nation's electric customers.